In the search for market leaders with high growth potential, many investors use systematic methods that join chart strength with business health. One well-known method is the Mark Minervini strategy, which uses a defined Trend Template to select for stocks in strong, confirmed uptrends. This method is combined with business filters to find companies showing quickening profit and revenue growth, a sign of high-growth momentum investing. The aim is to locate securities where a sound chart pattern is supported by a convincing business growth narrative, forming a combination of elements that have often come before major price gains.
EVERUS CONSTRUCTION GROUP (NYSE:ECG) stands as a present example that seems to meet both the chart rules of the Minervini template and the strict needs of a high-growth momentum filter.
Following the Minervini Trend Template
The Minervini Trend Template is made to remove personal bias by applying fixed chart rules, confirming a stock is in a definite, long-term stage 2 rise before it is reviewed for investment. A check of ECG's chart measures shows a firm match with these guidelines:
- Trend Position: The stock's present price of $125.40 trades notably above its increasing 50-day ($107.51), 150-day ($93.77), and 200-day ($87.65) simple moving averages (SMAs). Importantly, the 50-day SMA is above the 150-day SMA, which is above the 200-day SMA, forming the "ordered" moving average position Minervini looks for as proof of a sound, quickening uptrend.
- Nearness to Highs: ECG's price is within 25% of its 52-week high of $137.64, a central rule of the template that concentrates on strength instead of low price. At the same time, the present price is almost 290% above its 52-week low, confirming a strong recovery and continued upward momentum.
- Better Relative Strength: With a ChartMill Relative Strength (CRS) score of 97.78, ECG is performing better than about 98% of all stocks in the market. Minervini notes that real market leaders regularly show high relative strength, as it points to institutional buying and better performance despite wider market movements.
This chart base is vital because it clearly identifies ECG as being in a controlling uptrend, a required first step in the Minervini view for reducing risk and taking part in a stock's strongest rises.
Business Data Backing High-Growth Momentum
While the Trend Template confirms a stock is chart-wise sound, the "high growth momentum" part of the filter examines the business engine pushing the price movement. ECG's reported numbers show a company in a firm growth period:
- Strong Earnings Increase: The company's trailing twelve-month (TTM) EPS of $3.94 shows a year-over-year growth of over 40%. More notably, the latest quarterly EPS grew 61.2% compared to the same quarter last year, showing a quickening in profit.
- Steady Revenue Increase: Top-line growth is similarly convincing, with TTM revenue up 31.5%. Recent quarters have shown continued strength, with sales growth of 33.2%, 29.7%, and 31.0% over the last three reported quarters, in order.
- Analyst Belief and Results: ECG has exceeded both profit and revenue estimates in each of the last four quarters, with an average earnings surprise of over 63%. Also, analysts have been increasing their projections, with the average EPS estimate for the next fiscal year moved up by 6.3% over the past three months, a good sign of rising belief in the company's future path.
- Gaining Profitability: The company's profit margin in the last reported quarter was 5.47%, showing gain over margins from the same time in previous years. This indicates ECG is not only increasing sales but is also turning revenue to net income more effectively.
These business traits are needed for the strategy because Minervini's work shows that the largest stock market winners are nearly always backed by firm, and often quickening, profit and sales growth. The "high growth momentum" filter aims to catch this action, ensuring the chart breakout has a business cause.
Chart Condition and Present Position
According to ChartMill's own analysis, ECG holds a perfect Technical Rating of 10 out of 10, showing very good condition across short and long-term periods. The long-term trend is scored as positive. However, the report also gives a note of warning for near-term entry: the Setup Quality rating is now a 3. This shows that while the stock's trend is faultless, its recent price action has been unstable, making it difficult to find a defined, exact entry point with a close stop-loss. The analysis proposes waiting for a time of settling or a stability pattern to form, which would give a clearer shape for entry matching Minervini's Specific Entry Point Analysis (SEPA) rules.
You can examine the complete, detailed chart review for ECG on its Technical Analysis Report page.
Locating Comparable Prospects
EVERUS CONSTRUCTION GROUP offers an example of a stock that fits the two filters of a strict trend-following template and high-growth business momentum. For investors looking to search for similar prospects that match this ruled growth-and-momentum method, the ready-made screen is available to use. You can find more possible examples by using the "High Growth Momentum + Trend Template" screen here.
Disclaimer: This article is for informational and educational purposes only. It is not a recommendation to buy or sell any security. The analysis is based on data provided and referenced methodologies, but past performance is not indicative of future results. Always conduct your own due diligence and consider consulting with a qualified financial advisor before making any investment decisions. Please read our full disclaimer here.